From: York Haven, PA

We, brother, sister, and I, are very soon to be a beneficiary of a NY trust eatablished and owned by an estate in NY.

My mother set it up and her three children are were the beneficiaries.

Upon her death (August 2005) the proceeds of the trust are to be disbursed to her three children.

My sister is a NY resident, but my brother and I are PA residents.

I imagine we will be subject to a PA income tax on the estimated $105,000.

Is it possible to reduce the tax on this "windfall"?

I am retired, age 65, on Social Security and a $334 monthly pension and have no debts.

TIA

Allan

 

Dear Allan,

Sorry to learn about your mother.

But that's ok about the money.

When you get the money from the estate or the trust, it will come to you after taxes (unless there's an IRA in there, but that's another story).

The only taxes you'll ever pay on the money from the estate is the tax on the interest or dividends you get from investing it. Or rental income. Or... the earnings from whatever business you might start.

And while you might be retired and 65, you certainly aren't dead. Odds are, if your mother lived this long, so will you. So you've got another 20 or 30 years to fill.

So, take that money and do something to re-invent yourself and increase your joy in life.

If all you have is Social Security and a tiny pension, perhaps you can use the money to start some part-time enterprise that you'll enjoy and that will also bring you a stream of income.

Oh yes - tax advice. No taxes. No advice needed.

Best wishes,
Eva Rosenberg, MBA, EA